In Texas, the reason for termination of employment – whether it was for cause, without cause, a layoff, a reduction in force, or any other reason – does not affect the enforceability of a non-compete agreement. Therefore, employers should not assume that non-competition agreements are no longer enforceable and must carefully approach enforcement of such agreements against departing employees as well as the hiring of new employees who may be still bound by non-competition agreements with their former employers.
Sometimes, a business can be excused from performing under a contract due to a force majeure or an “Act of God” provision in that agreement. However, given that COVID 19 is a new phenomenon, there is no clear law on (1) whether COVID 19 qualifies as an “Act of God” or a force majeure event and (2) many contracts will need to be interpreted to determine whether their particular force majeure clauses encompass COVID 19. Needless to say, the parties may disagreed about the interpretation.
Over the next several days, I will provide a break down of the new employment laws and guidances issued by various government agencies that Texas employers should know about when dealing with COVID 19. If you have any follow up questions, please reach out to me at Leiza.Dolghih@lewisbrisbois.com.
“Hope for the best, but plan for the worst” should be every employer’s motto in handling the departure of employees. While most will leave without
Clear legal agreements help minimize the chances of litigation, which can quickly exhaust the company’s monetary resources and distract it from what really matters – building a business. These agreements also help attract investors.
Rocketlawyer.com has recently been advertising “free non-compete agreements” online. In fact, it is the very first advertisement that pops-up when you google “non-compete agreements.” So,